Bank of England Governor Mark Carney at the IMF
- Monetary policy may have to 'move in order to stand still' due to possibility that global equilibrium interest rates are rising
- De-integration effects of Brexit are likely to be inflationary
- Reiterates that hikes are likely to be gradual and limited
- Lower immigration due to Brexit could contribute 'more materially' to inflation pressure in the short term, only modest impact in long term
- Main question about Brexit's impact on inflation is extent it is likely to be brought forward
The bolded is important. The thinking is that a hike is because others are hiking. That's more of a one-off signal, or a reluctant signal. Cable, rightfully, doesn't like it.
However, in the text of the speech, he says that's a secondary reason to raise rates.
"The case for a modest monetary tightening is reinforced by the possibility that global r* may be rising, meaning that monetary policy has to move in order to stand still," is what he says in the full text.
After the speech there will be more headlines because Carney is hosting a Q&A with Christine Lagarde.